Correlation Between TransAlta Corp and Datang International
Can any of the company-specific risk be diversified away by investing in both TransAlta Corp and Datang International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TransAlta Corp and Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAlta Corp and Datang International Power, you can compare the effects of market volatilities on TransAlta Corp and Datang International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in TransAlta Corp with a short position of Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAlta Corp and Datang International.
Diversification Opportunities for TransAlta Corp and Datang International
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TransAlta and Datang is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TransAlta Corp and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International and TransAlta Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on TransAlta Corp are associated (or correlated) with Datang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang International has no effect on the direction of TransAlta Corp i.e., TransAlta Corp and Datang International go up and down completely randomly.
Pair Corralation between TransAlta Corp and Datang International
If you would invest 890.00 in TransAlta Corp on September 6, 2024 and sell it today you would earn a total of 278.00 from holding TransAlta Corp or generate 31.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 1.56% |
Values | Daily Returns |
TransAlta Corp vs. Datang International Power
Performance |
Timeline |
TransAlta Corp |
Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TransAlta Corp and Datang International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TransAlta Corp and Datang International
The main advantage of trading using opposite TransAlta Corp and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAlta Corp position performs unexpectedly, Datang International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Datang International will offset losses from the drop in Datang International's long position.TransAlta Corp vs. Pampa Energia SA | TransAlta Corp vs. Vistra Energy Corp | TransAlta Corp vs. NRG Energy | TransAlta Corp vs. Power Assets Holdings |
Datang International vs. Maxim Power Corp | Datang International vs. Pampa Energia SA | Datang International vs. NRG Energy | Datang International vs. Vistra Energy Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |